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Opinion

The impact of extreme politics on British businesses

At the FD Surgery 2017, extreme politics was just one of the areas that the CFO-centric conference gave a review of. In what was its second year, the event welcomed finance heads from British businesses for a day of discussion about the good, bad and ugly impacting UK firms.

For the morning session entitled Trump, Brexit and extreme politics, the panellists assessing the key moments that UK SMEs have been met with in recent times included:

Alan Burns, CRO, Photobox

Mike Wroe, former CFO of Just East

Stephen Adams, partner at Global Counsel

Paul O’Leary, CFO, Boden

Burns started off proceedings, opening with what he considered the most extreme politics we’ve seen recently.

“Pre-US elections, I would have said Brexit. But I think the election of Trump takes us to another level – it’s Trump and then Brexit,” he opined.

Wroe, however, claimed the financial crisis in 2007 and 2008 still haunts him. “The destruction of interest rates has seen a change in business.”

Adams was reluctant to use the term extreme politics, claiming it could risk a misdiagnosis of problems in terms of how people feel about the economy. “It seems impossible to not conclude Brexit is the most extreme politics we’ve seen – it will restructure way we work with largest commercial partners.”

Backing up the points of both Burns and Adams, O’Leary felt as though Trump and Brexit are both extreme politics that businesses will have to overcome – but said one was more threatening than the other.

“Brexit is permanent and Trump’s election is not permanent, so that’s what will allow businesses to interpret Brexit. In the US, you’ve just got to survive the Trump era and work afterwards,” he explained.

Wroe, meanwhile, is convince that UK leaders fall into a pattern of declaring that everything is “unprecedented” even though we should be used to the unexpected happening at this point.

“As businesses, we’ve just got to get on with it. When Reagan was elected, it was unprecedented – an ageing actor has been elected, it was a shock. But we have to be really careful about ‘unprecedented’ events, because they’ve always been like that,” he said highlighting the appointment of Trump and Brexit decision still surprising the public.

Adams added: “Trump is different. We shouldn’t delude ourselves that change on this scale is entirely unprecedented. The challenge for business isn’t to recognise the extremists of Marine Le Pen or Nigel Farage are going to take power, it’s how they’re going to take mainstream politics to adjust.

“UKIP’s enduring legacy will not be that it never got near power, it reset the debate. What we’re trying to work out is how the mainstream politicians will keep these on the margins.”

“In terms of globalisation, it seems extreme politics has convinced the population that globalisation is not good for everyone,” said O’Leary. “It used to feel as businesses we need to make sure it’s a global business, that it is good for people in the country and those we employ.”

Continuing on the international theme, Burns said the difficulty with the current climate is hiring at Photobox.

“The big challenge we’ve had the last couple years and since the referendum vote is we do not know what ultimate position on movement of people will be,” he said.

“For a business like ours in several European countries, that ships goods across the border, it makes planning very challenging.”

Wroe said that attempting to embrace scenario planning at Just Eat “can drive yourselves mad”. The major thing was trying to retain flexibility within the company when it came to decisions and recruitment efforts.

“Keep flexibility in business, which is good business practice, or you can drive yourself mad,” he said.

O’Leary, meanwhile, believes that now is the golden window of opportunity for negotiations with a view of how goods can be sold now, and in five to ten years.

In terms of leaving the EU, Wroe insisted that Europeans are bemused by the decision.

“They don’t understand it. We were last in of the big countries and first out, therefore, in the core of Europe, they don’t understand it. The initial reaction was ‘do you not like us? What do you not like? Big trade? What about free movement?’

“Fortune favours the brave. There’s opportunity for people who don’t sit back in little England to make sure relationships don’t fall apart. At the end of the day, it’s people [who make business]. The real danger is we hold back too long.”

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Real Business has championed entrepreneurship in the UK since 1997. It is now the main source of inspiration, education, and collaboration for the owners of fast-growing businesses, from startups to mid-market companies. Real Business provides readers with high profile interviews, news, insight and industry benchmark reports, as well as a growing stable of events tailored to SME growth.